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A strange event in the DeFi ecosystem occurred today when a small hack took place — and the hacker failed to make off with the stolen funds.

The exploit happened at a lesser-known DeFi protocol called Zeed, which fashions itself as an “autonomous decentralized financial integrated ecosystem” that runs on BNB Chain.

At about 7.15 AM UTC, the protocol was attacked by minting extra rewards. The rewards were sold on the market, crashing the token’s price to zero.

Afterwards, the hacker destroyed the contract used in the exploit. This meant that any tokens held by the contract could no longer be moved, security expert PeckShield confirmed in messages to The Block.

“The hacker kills the contract, but forgets to transfer the profit,” noted PeckShield.

Blockchain security firm BlockSec added, “Interestingly, the attacker does not transfer the obtained tokens out before self-destructing the attack contract. Probably, he/she was too excited.”

It is unclear if there was anything that prevented the hacker from taking the tokens.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Goldman Sachs is reportedly looking to help crypto exchange giant FTX navigate its way through US regulations, among other concerns, according to a report by Financial Times on Thursday.

People familiar with the matter cited by the publication said Goldman CEO David Solomon and FTX chief Sam Bankman-Fried (SBF) held discussions in March about possible avenues of collaboration.

The two were said to have talked about ways in which Goldman Sachs could advise FTX on the latter’s plan to offer retail trading of crypto derivatives. The exchange’s US arm filed for approval with the Commodity Futures Trading Commission (CFTC) in March for margin trading of crypto derivatives.

FTX’s crypto derivates application was the subject of a Congressional hearing with the CFTC chairman in March.

According to the Financial Times, Solomon proposed that Goldman advise FTX in a dialogue with the CFTC. Other topics discussed included plans for future funding rounds and a possible initial public offering for FTX.

FTX raised $400 million in a Series C funding round in January that valued the company at $32 billion. SBF is reportedly talking with private investors about another possible funding round.

Solomon’s reported overtures to SBF are in keeping with Goldman’s expanding footprint in the crypto space. This trend is a departure from the largely anti-crypto posturing of major players on Wall Street in previous years.

Goldman already offers over-the-counter (OTC) crypto options trading and was part of a new funding round for blockchain security outfit Certik earlier in April.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Blockchain payments startup XREX has tapped an official with more than a decade’s experience at branches of the US Federal Reserve in San Francisco and New York as its director of risk management. 

Michael Shing is joining the company as it expands to serve more users in India, Africa, the Middle East, South America, Southeast Asia and beyond, XREX said in a press release today. He will oversee the analysis and modeling of operational and business risks.

During his tenure at the Federal Reserve Bank of San Francisco, Shing’s focus included Treasury-related risks such as liquidity and asset-liability management. Prior to that, he led the implementation of a variety of vendor models at the New York Fed, providing stress-testing analysis, and reporting on investment securities portfolios across several asset classes. 

Shing is the latest example of a slew of former regulators and public officials being snapped up by crypto firms. Earlier this month, exchange giant Binance appointed Steven McWhirter, a top official from the UK’s Financial Conduct Authority (FCA), as its global director of regulatory policy and hired Stéphanie Cabossioras from France’s Autorité des Marchés Financiers. 

The Bank of England’s fintech chief also left to join custody platform Fireblocks in April. Last year, Austrian exchange Bitpanda hired former FCA official Matthias Bauer-Langgartner as its managing director for UK and Ireland and ex-UK chancellor Philip Hammond joined Copper as a senior advisor last year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

LimeWire has raised $10.4 million in a private token sale led by Kraken Ventures, Arrington Capital and GSR as it builds its platform for music-focused NFTs. 

News of the fundraise, unveiled on Thursday, comes a little over a month after the company announced it was plotting a comeback.

LimeWire originally gained notoriety in the 2000s as a place to download music and other files outside of mainstream channels. But, aside from the name and branding, the business proposition for LimeWire is completely new. 

The team behind the resurrection, which is currently based across Vienna, London and Berlin, says the platform will initially focus on music-linked NFTs. Its new iteration will allow fans and artists to create, buy and trade digital collectables without the current technical hurdles of the NFT landscape. 

Music-related assets will include limited editions, pre-release songs, unreleased demos, graphical artwork, exclusive live versions, as well as digital merchandise and backstage content. 

“As artists perform for live audiences again, positioning NFTs as exclusive backstage passes or access to unreleased content will become an invaluable avenue to strengthen direct engagement and loyalty with fans,” said Akshi Federici, a partner at Kraken Ventures.

Public sale coming

The brand said it would use the fresh funds to grow its team, extend partnerships and onboard major music artists to the platform.

A public sale of LMWR tokens will take place later in the year. Holders will be able to participate in a token reward program, reduce their trading fees on the platform, and gain access to exclusive community perks and regular LimeWire events. Further down the line, holders will also start playing a fundamental role in deciding which up-and-coming artists are supported by LimeWire and featured on the marketplace, the company said.

Investors in the round also included Crypto.com Capital, CMCC Global, Hivemind, Hard Yaka, Red Beard Ventures, FiveT, 720Mau5, the fund behind Canadian music producer Deadmau5, as well as DAO Jones, a group of investors from the music industry, including electronic music artist Steve Aoki.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Scroll, an Ethereum scaling project that uses zk-rollup technology, has raised $30 million in a Series A funding round as it plans to launch a testnet.

Sharing the news exclusively with The Block on Thursday, Scroll said Polychain Capital led the funding, with Bain Capital Crypto, Robot Ventures, Geometry DAO and others participating.

Several angel investors, including the Ethereum Foundation’s Ying Tong and Carlos Aria, and members of the Ethereum community, including Anthony Sassal, Ryan Adams and Santiago Santos, also joined the round.

Scroll co-founder Sandy Peng declined to comment on whether the funding was raised via an equity round or a simple agreement for future tokens (SAFT) sale.

Testnet plans

With fresh capital in hand, Scroll plans to increase its team size and launch a testnet.

The current headcount of Scroll is 20 and the project is looking to hire several people across different functions, including engineering and operations, said Peng. She said the testnet is scheduled to launch in the second half of this year.

Scroll was founded early last year by Peng, Ye Zhang and Haichen Shen. It aims to scale Ethereum using zk-rollups, a Layer 2 technology that bundles Ethereum transactions off the main chain to support a larger number of transactions at a lower cost.

StarkWare and Matter Labs can be seen as Scroll’s closest competitors — both use the zk-rollup scaling technique.

When asked what Scroll’s unique advantage over StarkWare is, Peng said, “we are building a zkEVM solution as opposed to StarkWare’s zkVM.”

“That means developers in the Scroll ecosystem will enjoy an ‘EVM [Ethereum Virtual Machine] equivalent’ experience; any dapp that runs on zk Layer 1 can be deployed on Scroll,” she said.

As for Matter Labs’ zkSync network, it also has EVM compatibility like Scroll, but Scroll is more developer-friendly, according to Peng.

She said, with Scroll, Solidity developers can copy a smart contract byte code from Ethereum and deploy it on Scroll without making any changes to it. “We are EVM equivalent or native EVM by the Ethereum Foundation’s definition,” she said.

Specific details of Scroll’s technology will be announced in the next few months, said Peng.

The Series A round brings Scroll’s total funding to date to around $33 million. The project has previously raised about $3 million from angel investors, Peng said.

Scroll’s fundraising is the latest for an Ethereum scaling project amid continuing investor interest in the crypto sector. Last month, Optimism, an Ethereum scaling project that uses a different technique known as optimistic rollups, raised $150 million in Series B funding at a $1.65 billion valuation.

Immutable, an Ethereum scaling project focused on NFTs, also raised $200 million in Series C funding at a $2.5 billion valuation last month. In February, Ethereum scaling project Polygon raised $450 million in a token sale, and in November, Matter Labs raised $50 million in a Series B funding led by Andreessen Horowitz (a16z).

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto investors took home about $162.7 billion in realized gains in 2021, according to a blog post by blockchain analytics firm Chainalysis, showing it was a stellar year after $32.5 billion in 2020.

Out of this, US investors took the lion’s share of the profits, netting some $47 billion — around 29% of the total amount. These investors were followed by those in the UK, Germany, Japan and then China, which banned bitcoin mining and poured cold water on investing in crypto early in the year.

A big majority of the gains, 93%, was made in bitcoin and ether, according to the report. It noted that there were more gains in ether than bitcoin, but only by a few billion dollars. 

“We believe this reflects increased demand for Ethereum as the result of DeFi’s rise in 2021, as most DeFi protocols are built on the Ethereum blockchain and use Ethereum as their primary currency,” the blog post said.

The report is only a rough estimate of how much crypto investors made during the year because it’s based on on-chain analysis of moving funds — as opposed to knowing each individual’s trading performance. Chainalysis said it tracks the difference between funds when they are deposited on exchanges and when they are withdrawn. 

“It’s not perfect — ideally, we’d be able to calculate gains at the individual or wallet level rather than at the service level, but this methodology still gives us a reasonable estimate of total gains for cryptocurrency users in a given country,” Chainalysis acknowledged.

The report also noted that it’s hard to break down the on-chain data by country, since blockchain transactions do not inherently contain geographical information. The estimates are based on Chainalysis’s transaction data and web traffic information.

Chainalysis highlighted China’s low growth rate, mostly caused by its crackdown on crypto. In contrast, it noted that the US saw a gain of 476% from the previous year.

This report only considers coins that chainalysis tracks and doesn’t address whether investors made other losses. Nor does it take into account taxes on the gains made.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Tesseract has launched a platform to enable other crypto firms’ customers to earn yield on their holdings, as the Finnish lending firm branches out from its core institutional service into white labelling.

Tesseract co-founder and CEO Yichen Wu told The Block in an interview that the product — an API-based service called Tesseract Earn — went live in the past few months. The business has already signed up its first batch of customers for the white-label platform in Europe and Asia.

The Helsinki-based lender is targeting mid-sized crypto businesses — such as wallets and exchanges — that are competing with giants like Binance and Coinbase, but which often lack the resources to devise interest-bearing products on their own.

All of these companies are looking for “sticky” products to help retain their customers, according to Wu. “Yield products are a way to do it,” he said. “They will essentially be able to offer their clients a BlockFi, Celsius-esque product.”

Tesseract Earn will enable partners to offer interest-bearing products with a risk and return profile of their choosing. Tesseract will generate yield for end-users through three main avenues: borrowing and lending; market making and arbitrage-based strategies; and DeFi yield farming.

Wu described credit as “the unsexy part of crypto,” but added that it’s also one of the most difficult to crack.

“You have a lot of those retail-facing platforms that are out there, that in my personal opinion… are just like a semi-time bomb that is waiting to explode,” he said, pointing to the hedge fund-like activity that underpins such accounts and a lack of regulation as major concerns. Tesseract is supervised by the Finnish Financial Supervisory Authority.

Cash rich

Founded in December 2017, Tesseract has until now operated quietly as a B2B-only company focused on lending out deposits from institutions and sophisticated investors. Wu likened the business to Genesis, the US crypto trading heavyweight.

Its profile was boosted by a $25 million Series A fundraise led by Augmentum Fintech in June 2021. Half a dozen venture capital firms, including LeadBlock Partners, Coinbase Ventures and trading firm Wintermute, also participated in the raise.

Wu said that Tesseract was cash flow positive by the time the Series A funds came in, but chose to raise anyway — primarily to instil confidence in potential partners.

“When we started to deal with a lot of larger financial institutions, regulated entities… Their first line of reference point is: who has invested in you? Has any famous investor put a stamp on you, so we know you’re not a scam? Which is a silly thing, but it’s a strong signal to the market,” Wu explained.

Most of the $25 million is still sitting in the bank, he added.

Since the raise, Tesseract’s headcount has grown from 6 to around 40. Revenues and lending are also up substantially, with the firm’s outstanding loan book now in the hundreds of millions of dollars. Wu is hoping that the Earn platform — which he said takes aim at a “neglected market segment” — can help boost that number to a couple of billion dollars by year-end.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto exchange Binance is enforcing tougher Know Your Customer (KYC) checks for Russian users after the latest wave of European Union sanctions.

In a blog post today, Binance said that it will limit services for “Russian nationals or natural persons residing in Russia, or legal entities established in Russia” with crypto holdings exceeding €10,000 (around $10,900), following the EU’s fifth package of anti-Russia restrictions. Users that fit this description will be made to complete a proof-of-address check.

Ukraine’s deputy minister of digital transformation Alex Bornyakov hailed the changes in a tweet. Binance CEO Changpeng Zhao, who sees crypto as a “terrible” method of avoiding sanctions, has previously described blocking all Russians from using crypto exchanges as unethical.

Users that must now undergo checks in line with the new restrictions will be placed in “withdrawal-only mode,” according to the blog post — meaning no deposits or trading will be permitted.

“The limit also covers all spot, futures, custody wallets, and staked and earned deposits. In addition, all deposits to accounts for Russian nationals or natural persons residing in Russia, or legal entities established in Russia with over €10,000 will be restricted,” the post continued.

Russians living outside the country who can verify their address and those within Russia but with less than €10,000 will be unaffected by the changes. Furthermore, Russian nationals and people and entities within the country whose holdings exceed the threshold and who have open futures and derivatives positions will be given 90 days to close them. They won’t be allowed to open new positions.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

LVMH, the luxury goods conglomerate overseeing brands like Christian Dior, Marc Jacobs, Tiffany & Co., and Louis Vuitton, is looking at the metaverse and blockchain gaming “very carefully,” said Jean Jacques Guiony, LVMH’s Chief Financial Officer, in the company’s latest earnings call.

Several companies under the LVMH umbrella have already begun experiments in crypto, NFTs, and gaming.

Louis Vuitton, for example, has a stand-alone mobile game where players have a chance to earn NFTs, as The Block recently covered.  A partnership between crypto-asset company Ledger and Hubolt has also been in “high demand,” the company revealed during the earnings call, which took place on April 12.

Tiffany’s executive Alexandre Arnault recently turned his CryptoPunk NFT into jewelry. According to OpenSea data, the company also purchased an NFT in March worth 115 ETH, or approximately $380,000. 

Tiffanys’ CryptoPunk.

 “The evolution of fine art collecting is here and the future is bright with NFTs,” Tiffany’s tweeted in March. 

Despite the enthusiasm from individual brands, LVMH’s chief executive Bernard Arnault (father of Tiffany’s executive Alexandre) voiced some concern during the company’s January earnings call.

“We have to be wary of bubbles,” Arnault said at the time.

During last week’s earnings call, Guiony mentioned that it’s hard to comment on what the metaverse means for the company just yet, because “the whole thing is interesting, promising” but still nascent.

“I think I would make a fool of myself if I tell you exactly what we have in mind and that [the metaverse] is very clear and that we know exactly what we will be doing in the future,” he said. “There are many initiatives that could possibly lead to business developments […] rest assured that whatever happens, we will be a part of it. But for the time being, whatever happens is unknown to us.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto exchange Binance drew sharp criticism on Wednesday following the unveiling of a new Twitter emoji.

The new Binance emoji is a literal swastika pic.twitter.com/lCOuWuPnyF

— mann0000.eth 🦇🔊 (@nftshare) April 20, 2022

Binance’s social account and CEO Changpeng Zhao both tweeted the new emoji earlier today. The image depicts the Binance logo in a square surrounded by four pixelated arms at right angles, strongly resembling the Hindu swastika, which connotes prosperity and good luck.

The Nazi Party of Germany adopted the swastika as its symbol in the early 1920s and today, that version is globally recognized as a hate symbol. 

After an immediate outcry on Twitter, the firm tweeted that it recognized the issue and is redesigning the emoji.

“Well that was obviously really embarrassing,” the account tweeted. “We’re not sure how that emoji got through several layers of review without anyone noticing, but we immediately flagged the issue, pulled it down, and the new emoji design is being rolled out as we speak.”

It also appears Zhao has deleted his tweet using the emoji, though he has not issued a statement himself.

Twitter was not immediately available for comment as to how the emoji passed through the social media site’s filter.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.